These Sectors Get Upgraded Next

After six straight weeks of gains, Cramer said Monday, the market shows no signs of letting up. And he credits the most recent moves to Wall Street researchers who sat on the sidelines for most of the last year’s rally but are now getting in the game.

Look at this list of recent upgrades: Best Buy , Caterpillar , Joy Global , Under Armour , Ciena … Cramer rattled off 17 new analyst calls, and most of them came with the stocks at their 52-week highs. Talk about better late than never.

A perfect example of this trend was Bank of America Merrill Lynch’s upgrade of Ciena on Monday morning. This from the guy who panned the company’s purchase of a key part of the failed Nortel business and put a $10 price target on the $14 stock. Well, now CIEN is at $17 and he’s predicting a move to $22 given that the acquisition is creating “a global optical powerhouse.” And again, this call’s being made with Ciena at its 52-week high, not when it’s bottoming.

This BofA Merrill analyst isn’t alone, and Cramer isn’t saying that these upgrades are wrong. In fact, he likes the changes these companies made, the cost cuts they pushed through, and he thinks their bottom lines are set to roar higher. He isn’t worried about light revenue growth, either. Because when rev growth kicks up, it’ll be time to take profits. His point today was that these analysts are part of a time-honored tradition that we have seen so many times, one that causes a second wave of increases in the averages: late-to-the-party upgrades.

So who’s next? Cramer expects to see upgrades in the banks, where the stocks have bottomed because new loans aren’t going bad; aerospace, thanks to a Boeing -inspired multiyear growth cycle; infrastructure, as more and more orders pour in; timber stocks as housing bottoms; and in the tech component plays, as orders accelerate because of new trends like the Apple iPad.